Latest news with #ImplementationAgreement
Time of India
17-07-2025
- Business
- Time of India
SC upholds Himachal Pradesh's demand for 18% free power from JSW plant
The Supreme Court on Wednesday upheld the Himachal Pradesh government's demand for 18 per cent free electricity supply from JSW Hydro Energy 's 1,045-megawatt Karcham Wangtoo hydroelectric power plant in the state. While setting aside the Himachal Pradesh High Court 's order for allowing maximum 13 per cent of free electricity to the state government, a bench of Justices P.S. Narasimha and Atul S. Chandurkar held that the CERC Regulations 2019 do not prohibit JSW from supplying free power beyond 13 per cent to the State, and the Implementation Agreement does not stand overridden by the operation of these Regulations,' the top court said. 'Once the Regulation does not prohibit the supply of free power beyond 13 per cent, JSW cannot rely on it to wriggle out of its contractual obligations . Such an interpretation is necessary to recognise and enforce the generating company's freedom of contract, which includes its choice of business dealings,' the apex court said, adding that the Regulatory Commissions, APTEL, and the courts must enforce these contractual obligations and ensure that their interpretation of regulations does not allow the party to circumvent and breach its contractual undertakings when the same is not intended by the regulation itself. As per agreements executed between JSW Hydro and the Himachal Pradesh government, the former's plant was supposed to supply free power at 18 per cent of the net generation for 28 years to the state after the completion of 12 years of commercial operations of the project that commenced in 2011. However, CERC (Terms and Conditions of Tariff) Regulations, 2019 capped the maximum free supply at 13 per cent of the net generation on the ground that contractual agreements, to the extent that they are inconsistent with the applicable regulations, shall stand overridden by their operation. The HC had accepted the CERC's findings and directed that the implementation agreement stood modified. Coming down of JSW for its contradictory positions, Justice Narasimha said that the company cannot be allowed to approbate and reprobate, or blow hot and cold at the same time to secure relief under the law. 'The regulator has the expertise, specialisation, and institutional memory to conduct such an interpretative exercise to further the objective of the regulatory regime and systematically lay down legal principles. In this light, the High Court should not have entered into the domain of interpreting these Regulations which deal with tariff determination, as the same falls within the exclusive domain of the CERC,' the SC said.
&w=3840&q=100)
Business Standard
16-07-2025
- Business
- Business Standard
SC rules in favour of Himachal in power dispute with JSW Hydro Energy
The Supreme Court on Wednesday ruled against JSW Hydro Energy, a subsidiary of JSW Energy, in its dispute with the Himachal Pradesh government over the supply of 18 per cent free power to the state. JSW Hydro Energy had argued that, under the Central Electricity Regulatory Commission (CERC) Tariff Regulations, it was required to supply no more than 13 per cent as free power. 'We have allowed the appeal by the State of Himachal Pradesh by interpreting the provisions of the Electricity Act, 2003 and the CERC Regulations, 2019 in the context of the subsisting and continuing contractual relationship between the parties,' said a Bench of Justices P S Narasimha and Joymalya Bagchi. The Bench held that the CERC Regulations, 2019, did not prohibit the company from supplying free power beyond 13 per cent and that the Implementation Agreement remained valid and enforceable. While CERC must give effect to its regulations and allow a pass-through of up to 13 per cent free power in tariff calculation, any additional supply is a contractual obligation governed by the Implementation Agreement. On interpreting the CERC Regulations, the court stated that the 13 per cent limit applies only for tariff purposes and does not prevent the company from supplying more than that amount of free power. 'Further, a writ petition before the High Court for aligning the Implementation Agreement with the CERC Regulations, 2019, and the CERC's order dated 17.03.2022 is not maintainable,' the court held. In allowing the state's appeal, the Supreme Court criticised the High Court for intervening in the tariff fixation domain, which falls within the exclusive jurisdiction of the CERC. 'Considering the expertise and specialisation of the CERC as a statutory regulator and the wide-ranging jurisdiction it exercises under the Electricity Act, as well as Respondent No. 1's (JSW Hydro Energy) conduct in not seeking relief against the appellant (State of Himachal Pradesh) before the CERC, we have held that the present writ petition was not maintainable before the High Court,' the Bench added. JSW Hydro Energy Limited operates a 1,045 MW hydroelectric project at Karcham Wangtoo, originally allotted to Jaiprakash Industries Limited under a Memorandum of Understanding signed in 1993. Under the subsequent Implementation Agreement with the Himachal Pradesh government, JSW (through its predecessor) had agreed to provide 18 per cent of net power generation to the state free of cost after the first 12 years of commercial operation. Later, JSW approached the CERC and then the High Court when the state declined to revise the free power obligation to 13 per cent in line with the 2019 regulations. The High Court had ruled in favour of JSW and directed the state to align the Implementation Agreement with the CERC Regulations. The Supreme Court has now overturned that ruling.
Time of India
16-07-2025
- Business
- Time of India
SC upholds Himachal's demand for 18% free electricity from JSW Hydro Energy's Karcham Wangtoo plant
The Supreme Court on Wednesday upheld the Himachal Pradesh government's demand for 18% free electricity supply from JSW Hydro Energy 's 1,045-megawatt Karcham Wangtoo hydroelectric power plant in the state. While setting aside the Himachal Pradesh High Court's order for allowing maximum 13% of free electricity to the state government, a bench of Justices P.S. Narasimha and Atul S. Chandurkar held that the CERC Regulations 2019 do not prohibit JSW from supplying free power beyond 13% to the State, and the Implementation Agreement does not stand overridden by the operation of these Regulations,' the top court said. Explore courses from Top Institutes in Select a Course Category Technology MCA Healthcare Public Policy Data Science Data Science Artificial Intelligence Others CXO Cybersecurity Data Analytics Digital Marketing healthcare others Finance Leadership Management Design Thinking Operations Management Project Management Degree Product Management MBA PGDM Skills you'll gain: Duration: 12 Weeks MIT xPRO CERT-MIT XPRO Building AI Prod India Starts on undefined Get Details 'Once the Regulation does not prohibit the supply of free power beyond 13%, JSW cannot rely on it to wriggle out of its contractual obligations. Such an interpretation is necessary to recognise and enforce the generating company's freedom of contract, which includes its choice of business dealings,' the apex court said, adding that the Regulatory Commissions, APTEL, and the courts must enforce these contractual obligations and ensure that their interpretation of regulations does not allow the party to circumvent and breach its contractual undertakings when the same is not intended by the regulation itself. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo As per agreements executed between JSW Hydro and the Himachal Pradesh government, the former's plant was supposed to supply free power at 18% of the net generation for 28 years to the state after the completion of 12 years of commercial operations of the project that commenced in 2011. However, CERC (Terms and Conditions of Tariff) Regulations, 2019 capped the maximum free supply at 13% of the net generation on the ground that contractual agreements, to the extent that they are inconsistent with the applicable regulations, shall stand overridden by their operation. The HC had accepted the CERC's findings and directed that the implementation agreement stood modified. Live Events Coming down of JSW for its contradictory positions, Justice Narasimha said that the company cannot be allowed to approbate and reprobate, or blow hot and cold at the same time to secure relief under the law. 'The regulator has the expertise, specialisation, and institutional memory to conduct such an interpretative exercise to further the objective of the regulatory regime and systematically lay down legal principles. In this light, the High Court should not have entered into the domain of interpreting these Regulations which deal with tariff determination, as the same falls within the exclusive domain of the CERC,' the SC said.
Zawya
07-04-2025
- Business
- Zawya
Inside Uganda's $4bln refinery deal with UAE investor
After failed attempts that took Uganda around the globe in search of a partner for its $4 billion refinery, the country finally landed an investor in the United Arab Emirates (UAE), leading to the signing last weekend, of a historic deal between the government and Dubai-based Alpha MBM Investments Llc, whose subsidiary which will finance, design, develop and operate the 60,000 barrels-per-day facility. The refinery is a greenfield investment expected to contribute 9 percent of Uganda's GDP, once it comes onstream. This figure could potentially jump to 20 percent when the Kabalega Industrial Park, where the facility is located, and includes a manufacturing hub for petrochemicals, is fully developed and operational, according to Uganda National Oil Company (Unoc). The Implementation Agreement (IA), is a suite of key commercial agreements for the project, including the Crude Sales Supply Agreement, the Shareholders Agreement and the Host Government Agreement all embedded into one. Initially pencilled in for signing at 2pm, the IA was eventually signed 'at the last minute' on March 29, after a hectic day of back-and-forth activity emailing and faxing documents, amending clauses and renegotiating terms of the deal, which highlights the difficulty that the parties face to put into effect some of the refinery's commercial terms on which the parties lacked consensus. Energy Minister Ruth Nankabirwa signed on behalf of the government, while Unoc Chief Executive Proscovia Nabbanja and Sheikh Mohammed bin Maktoum bin Juma al Maktoum, who leads the Alpha MBM Group, signed on behalf of their companies, the implementing parties. Read: Uganda signs deal with UAE investment firm over oil refineryAlpha MBM will hold a 60 percent stake in the refinery, while the Uganda government retains a 40 percent interest, held through its national oil company's wholly-owned subsidiary, Uganda Refinery Holding Company. Under the deal, Unoc – itself a 15 percent upstream investor in both the TotalEnergies operated Tilenga (190,000 barrels of oil per day) and CNOOC's Kingfisher (40,000 barrels of oil per day) oilfields – will have the first call on crude, to supply the refinery.'Unoc will purchase the crude and pay the refinery a fee to process the oil,' said a source familiar with the IA. President Yoweri Museveni, a strong advocate of the project as crucial for the country's energy security and export of refined products to economies in the region, witnessed the signing in Kampala.'The oil refinery is not just about fuel but also about Uganda producing and exporting refined products instead of importing them. We must stop exporting raw materials and instead add value to everything we produce,' President Museveni said, in a post on X after the signing ceremony. The deal is intended for the refinery to keep in touch with the upstream projects, which are at least two years ahead in development. In her New Year's Day media briefing, Nankabirwa set strict timelines to commence negotiations on key commercial agreements and sign before end of the first quarter of 2025. Thus, implementation of the project that has been moribund for the last 13 years now begins in earnest, to last three years, after which the facility will improve Kampala's balance of payments by $591 million a year, contribute up to $3.3 billion to Uganda's GDP annually, and up to $8.2 billion in capital formation. For a country that runs an import bill of $2 billion a year, according to the latest data from the Petroleum Supply Department in the Ministry of Energy, the refinery makes economic sense for Uganda, as it would pay off handsomely and tap into the East African market for refined petroleum products. In a region with no operational refinery, the Uganda facility would take a chunk of the market share from the import terminals on the Indian Ocean. Energy economists argue it would outprice imports from the Gulf arriving via the ports of Mombasa and Dar es Salaam. The oil refinery project will also create an estimated 32,000 direct and indirect jobs. Yet it is cautious optimism for most. Uganda has been here before, negotiating deals that collapsed at the eleventh hour. In addition, questions surround the Emirati investor and the deals signed with the government, with red flags raised by top officials and state agencies about the company's capacity to do the job, The EastAfrican has learnt. Read: Uganda in talks with UAE firm over $4bn oil refineryIn late April 2023, just before the latest deal with the refinery investor fell through, the government and its then partner, the Albertine Graben Energy Consortium (AGEC) negotiated all the key commercial agreements for the development and operations of the refinery. However, they still hit a dead end after failing to reach the final investment decision (FID). The AGEC group comprised US companies Yaatra Africa LLC, Nuovo Pignone International SRL, a Baker Hughes subsidiary, itself a GE company, Lionworks Group Ltd and Italian firm Saipem S.p. A, which brought a lot of technical expertise to the discussions. The negotiations involved upstream companies TotalEnergies, CNOOC and Unoc to ensure committed feedstock from the government of Uganda and the Joint Venture Partners, as well as negotiating terms for establishing operations of a commercially viable refinery receiving financing via capital markets.'The Government of Uganda and its Upstream Joint Venture Partners have made a commitment to AGEC to provide the crude supply to the Energy Security and Transition project and the talks with them are at advanced stages. The Project includes a refinery, product pipeline and product storage will provide energy products to Uganda and the East Africa region.'We look forward to reaching FID in the not-too-distant future as we conclude various agreements. The project will be transformative for East Africa—it is both value adding to Ugandan resources and will replace some of the carbon-intensive logistics of getting refined products into the region and provide alternative sources of and types of greener fuels for firms and households,' Paolo Pascuzzi, the AGEC country director, said at the time. In another eight weeks, the Project Framework Agreement – signed between the government and AGEC in 2018 and renewed twice due to Covid-19 disruptions – expired and the refinery project reverted to the government, despite powerful lobbyists shrewdly arranging meetings with President Museveni to salvage the project. Other companies have entered negotiations with Kampala, but quit on the verge of agreeing final terms. First up in February 2015 was a consortium led by RT Global Resources – a subsidiary of Russian hi-tech products producer Rostec – along with VTB Capital and oil company Tatneft. According to the government, discussions with RT which had been picked as the preferred bidder out of 75 companies, broke down in July 2016 after the group made additional demands regarding the shareholders agreement before it would agree to sign the contract. The government then invited South Korea's SK Engineering to replace RT, but discussions with the firm also failed, leading to a three-year protracted search that ended in 2018 with the signing of the PFA with the AGEC group, whose major milestone was completion of the project's Front End Engineering Design. President Museveni then appeared frustrated with private companies and directed the sector's political and technical heads to seek public corporations to partner with Uganda on the refinery project. Despite a memorandum of understanding inked in early 2023 with the Algeria state-owned midstream and downstream giant Sonatrach as a potential partner for the refinery – with chances to secure financing by the US and Italian firms consortium looking grim – Uganda government, in a surprise turn of events shunted the Algerian company aside. After signing with the North African nation, President Museveni announced: 'We are looking at Algeria investing in our refinery. We want to build an inland refinery.'Read: Uganda seeks new investors for its $4b refinery projectHowever, in January 2024 Kampala announced Alpha MBM, a privately-owned company, as the preferred partner to develop the refinery. In another surprise, in November 2024, Uganda's Cabinet passed a resolution to ditch seeking project finance and wholly fund the refinery through equity, under the impression that the Dubai-based firm is a well-heeled investor with deep pockets. But this prompted some red flags. First, in the negotiations, Alpha MBM several times rejected the government's proposal that the refinery be wholly financed through equity but Kampala insisted on the same. Experts say that despite signing the deal, the task to raise $2.4 billion from the company's coffers, is a significant challenge.'I can't think of any midstream or downstream projects without debt financing, outside of Chinese megaprojects,' says Marc Howard, a London-based consultant who focuses on advising investments in energy projects in the African market. Secondly, the entity that Kampala signed the refinery IA with is named Alpha MBM Llc International, a subsidiary of the Alpha MBM Investments LLC Group. Sources say this has caused some discomfort about Alpha MBM Llc International, a single-management company created six months ago, expected to execute a $4 billion project. Besides the refinery deal, five other agreements were signed, with similar single-management companies, to develop aviation hubs in Uganda, digitalise the land registration system, develop a digital government payment system, tree planting projects and logistics development.'The question among several government agencies is, these are all huge agreements, but do we know if these single-management companies have the capacity to execute the deals?' said an official familiar with the deals, who requested anonymity to speak freely. Thirdly, Alpha pushed for terms that would see the company compensated for its investment when the refinery project is retired after 25 years in production. This proposal would have a similar outcome to the rope-pulling that power distribution utility Umeme has been engaged in with government, after its 20-year concession came to an end. Since 2012, Uganda has attracted potential partners from Russia to South Korea to the US via Italy, but none of these companies has proceeded past the negotiation phase to take FID – the next milestone for the Alpha MBM Group. Officials in Kampala have declined to comment on when this might be, lest they jinx the project.'All we are waiting for now is FID, but when, we can't say,' says Tony Otoa, chief corporate affairs officer at Unoc, a 40 percent stakeholder through its subsidiary Uganda Refinery Holding Company.'You know how long the other one took. It's not on our side; it's on our partner's side. They can say let me go back and recalibrate first …it's not something we can give a definite answer on.' © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
